In Practice Which Market Index Would Best Be Used as a Proxy

question 8

Multiple Choice

In practice which market index would best be used as a proxy for the market portfolio in the CAPM?

• A)S&P 500
• B)Dow Jones Industrial Average
• C)U.S.Treasury Bill
• D)Wilshire 5000

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Definitions:

Optimal Solutions

The best possible outcomes or results that satisfy all constraints in a given mathematical model or real-life problem.

EOQ Principles

Economic Order Quantity principles involve calculating the optimal order size to minimize the costs related to ordering, receiving, and holding inventory.

Operations

The activities and processes used to produce goods and services in an efficient and effective manner.

Interactive Effects

The combined impact on outcomes resulting from the interaction of two or more variables.